Wednesday, July 04, 2007

Rising Islamism and (Bad) Islamic Economics

Any keen observer of the Islamic world must see this. Islamism is on the rise, first and foremost in terms of identity politics of the Muslim masses. Other forms of identity have failed, and have been abandoned by the masses: Arab nationalism and socialism of Nasser and the Ba`th; ancient nationalism such as Pharonic Egypt, Babylonian Iraq, Phoenecian Lebanon, and Cyrus's Persia, etc.; and globalized westernism. Elements of all three tendencies continue, of course, but they are constantly being pushed to the margins, as a new brand of Islamism is on the rise.

When they think of rising Islamism, people (and governments) in the west tend to think mainly of violent "jihadists", as they like to call them, but that is far from accurate. My own casual observation identifies mainly two groups. The first is a group who adopt the appearance of religiosity, in dress, language, etc., but retain a true identity that is some mixture of the three aforementioned (non-Islamist) tendencies. This includes people who use religion to advance their economic objectives, or simply to fit into an increasingly religious society.

The second group is much more interesting, but it appears to be suffering an identity crisis. They seek to live according to an Islamic ideal, but quickly discover that the Islamic ideal is largely fictional. This group includes well-meaning Muslims who turn to religious studies, only to discover the irrelevance and corruption of what they had considered scholarly circles. It includes MBA-holders who decide to get into "Islamic finance", only to discover that it is a racket for enriching cynical English bankers and lawyers, along with some corrupt, gullible, or greedy Muslims.

Most importantly, the second group includes most of the masses in Egypt, Pakistan, Indonesia, Malaysia, Turkey, and elsewhere, who would like to embrace the slogan "Islam is the solution", but fail to see how that solution would work in reality. This is the greatest failure of the school of thought generally known as "Islamic Economics", which sought to develop an understanding of Political Economy from "an Islamic perspective".

Timur Kuran has written a lot about this school of thought and its failures (most of those writings were reproduced in his recent book Islam and Mammon). Timur's conclusion is that the historical and intellectual record of "Islamic economics" illustrates that Islamism has also failed. It is definitely true that the brand of mid-Twentieth Century Islamism, which is still unfortunately marketed by most formal Islamic organizations, including the Islamic Development Bank and others, have indeed failed, and failed miserably, especially in the countries where it was taken most seriously -- Pakistan, Iran and Sudan.

However, if we are interested in real economic development in the Islamic world (beyond just pumping oil and gas, erecting buildings, and selling cell phones), we cannot dismiss the rising wave of Islamism. Indeed, religious inclinations can serve as a greater social bond for a new social contract than any nationalism or western materialism.

The difficulty is this: to find or develop and workable "Islamic solution", one must abandon historical and pietist utopianism. Islamic history, from its earliest days, has never painted a rosy picture. Islamic societies prospered when they were open to learning from others: Sassanid, Byzantine, etc. The famous Prophetic tradition said: "seek knowledge (`ilm), even [if you have to go to] China", and yet our young still seek knowledge (`ilm) only by going to Saudi Arabia, Pakistan, or Egypt, centuries after the Islamic world ceased to be a main depositary of knowledge.

The result is "Islamic finance", "Islamic jeans", and "Islamic Cola", along with satellite channels that broadcast feel good televangelist speeches about Islam, and broadcasting songs about Hijab and the Prophet in between MTV-style videoclips. This pattern cannot satisfy the increasing Islamist sentiment for long. Suspicions about the Muslim Brotherhood, Hamas, and other political Islamist groups notwithstanding, it seems almost inevitable that the growing wave of Islamism will bring a wave of political Islamists to power throughout the region.

The choice is most likely restricted to one of three scenarios:

(1) If they use the current pietist/historical brands of Islamism, those Islamist groups will fail, just like their predecessors did in Pakistan, Iran, and Sudan. Advocates of western capitalism will point to that failure to advocate abanadoning the Islamist identity. The Islamists will increase in their opposition to western capitalism, arguing that the fault was not with the ideal, but with its implementation. The rift between the two groups grows until every country in the region looks like Turkey.

(2) Some may follow the Erdogan route, but that is really just western capitalism dressed in Islamist garb, and thus unlikely to serve any long-term socioeconomic goals. In the meantime, as we learned from the recent Turkish presidency campaign fallout, the secularists will not allow even some token symbolic victories to Islamists. To survive, the Islamists must make more compromises to prove that they are "moderates", but they will only be tolerated if they become effectively more secularist than the secularists.

(3) A new definition of Islamic-democratic political economy emerges. It is not clear that Muslims have the requisite political and intellectual human capital to develop such a paradigm over the course of few decades. Daunting as the task may be, this seems to be the least painful of the available options, and the one most conducive to bona fide economic and social development in the short to medium term.


Blogger The Cook Crazy Economist said...

As Salaam Alaikum,

Thank you for the well written article. I've been trying to explain to my friends for the longest time about the potential predatory aspects of "Islamic Mortgages" I see pushed at all these conventions. Just because you change the word "interest" to "rental fee" doesn't make it any better, especially when all the "Islamic Mortgage" companies I checked with tried to charge us 30k-50k more in fees than a conventional bank. I'm still trying to figure out why do so many "finance" companies charge such a high premium for sub par customer service? These business practice reach just about every business owned by Muslims.. Living Halal shouldn't come with a 50% premium and good costumer service shouldn't be a concept only in the west. I think that if costumer service and a different outlook on work ethic in Muslim countries would go a long way toward solving economic problems in the region. No matter what "ideal" Islamic reform one tries, if we don't do away with tribal loyalty, hiring people based on what country they come from or what their skin color may be, and the nasty habit of treating labor workers like slaves who only get paid when the boss feels like it; then Muslim lands will always be stagnate in one form or another.

I look forward to more post in this topic.

thx again

10:23 AM  
Blogger 1789 Party said...

Professor El-Gamal;

It would be good to see some sort of Islamic-democratic political economy emerge. The problem seems to me that one-person, one-vote Islamic elections lead to a relatively ‘pure’ Islamic state with all that that entails. I think the slogan used by an Islamic candidate in Indonesia was ‘vote for me and you’ll never have to vote again.’ Perhaps the answer is some sort of means testing for voter eligibility to get things started.

In the absence of a strong executive, political Islam seems to have strong self-purifying forces that are incompatible with a modern economy.

3:53 PM  
Blogger Unknown said...

I am a volunteer at and we do get this question a lot both from non-muslims and as well as Muslims asking us "Well Islam don't allow Interest but in Islamic banking they do the same thing but give it a different name, instead of interest they call it fee" How do you explain that. Also they say when don't you put your money in Savings account instead of check account and get some interest and if you don't do that Bank is gaining from that money anyways.

Please help us answer this questions.

12:29 PM  
Blogger Unknown said...

This comment has been removed by the author.

1:47 PM  
Blogger Shibli Zaman said...

السلام عليكم

You stated:

"The difficulty is this: to find or develop and workable 'Islamic solution', one must abandon historical and pietist utopianism."

I agree. We all love the stories of Salah al-Din, Alp Arsalan and Sultan Baybars overcoming European invaders...just as cocaine addicts love their fix. These stories of our past glories have become opiates which have intoxicated the Muslim world into an inebriated stupor. I must admit to being a severe, and hardly recovering, addict myself.

"Islamic history, from its earliest days, has never painted a rosy picture."

We Muslims love to trade stories of the glories and victories of the Mamluks, but seldom do we tell the horrifying story of the Mamluk Queen Shajar al-Durr and how she was executed without Shar`i due process (beaten to death with clods to be precise) for her involvement in the Sultan Aybak's assassination. The only floral painting painted is the one we paint ourselves while we brush the scum under the rug. We do, indeed, have an illustrious past, but the image we portray of the "Islamic State" being Narnia is a hallucination.

"Yet, it is seldom Islamic societies prospered when they were open to learning from others: Sassanid, Byzantine, etc. The famous Prophetic tradition said: 'seek knowledge (`ilm), even [if you have to go to] China', and yet our young still seek knowledge (`ilm) only by going to Saudi Arabia, Pakistan, or Egypt, centuries after the Islamic world ceased to be a main depositary of knowledge."

Yes, they go to those countries and learn this in regards to the Hadith you quoted:

اطلبوا العلم ولو في الصين ..... هل هو حديث ؟؟

It truly boggles my mind that instead of benefitting from the message of seeking knowledge even up to China, they get bogged down with the Hadith being MawDu`. Yes, the Hadith in weak and has a severely weak narrator in its chain of I won't use it as evidence to prove that going to China is obligatory (DUH). Yet, I will use it as an legally non-binding inspiration to learn!

I do wonder why you said:

"The result is 'Islamic finance', 'Islamic jeans', and 'Islamic Cola', along with satellite channels that broadcast feel good televangelist speeches about Islam, and broadcasting songs about Hijab and the Prophet in between MTV-style videoclips."

I do understand about the trivial "Islamic" jeans, cola, financing, etc. Yet, I actually really dig `Amru Khalid and I think those commercials and songs inspiring Islamic messages are pretty darned cool. I know you didn't mention anyone or anything specific, but why do you object to them? Perhaps, I misunderstood.

2:43 PM  
Anonymous Anonymous said...

So are your happy writing sarcasm about our Ummah. Let me see inshallah whether you will be happy when you face yours and my Allah on the judgement day.
Let us see who smirks at whom.
How much ever you get accolades, remember just like all human beings one day or another you will die and face Allah.
So it is the right time to make use of your life now, to decide which side of the line you want to stand when you meet Allah on the judgement day.
No doubt at the present state of your mind, you are a disgrace to your self....

5:02 PM  
Blogger Truly Thinking said...

In your article "Rising Islamism and (Bad) Islamic Economics" you used the sentence "Islam has failed" for many times. But I assure you that Islam has not failed and and Islam can't fail at all. The from persists only on the implementers.

7:45 PM  
Blogger Mahmoud El-Gamal said...

I challenge you to find one instance where I used this sentence. Not once have I used it. I said once that "Islamism has failed" and that is because Islamism is a misinterpretation of Islam. Otherwise, all other instances of "failed" apply to specific institutions. I regret your inaccurate quotation.

7:49 PM  
Blogger hujazi said...

I like your post, any way, there is some article make me must re-thinking... Thanks.

12:54 PM  

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